Yokohama, Japan - JGC Corporation announces that it has finalized a Principal Agreement for the process design development and further collaboration with Arkenol, Inc., the technology provider, in the first cellulosic bio-ethanol production project.

Biomass-ethanol as an alternative fuel for automobiles is now attracting considerable interest in the United States. This follows a sudden steep rise in the price of crude oil and the Government's policy of reducing the nation’s dependence on imported energy resources. Furthermore, the utilization of biomass-ethanol as a resource responds to the strong public demand to cut CO2 emissions in the U.S.

Since the early 1990's, close attention has been given to production technologies for the conversion to fuel of woody residue biomass resources obtained from agricultural wastes (cores, stalks, etc.) and waste lumber. During this period, JGC entered into a technology licensing agreement with Arkenol, as the owner of the world-wide-patented cellulosic ethanol production technology. Subsequently, JGC continued to conduct research and testing directed at implementing Arkenol's technology and enhancing its performance with the integration of JGC-developed fermentation and distillation technology.

In 2002, JGC was awarded a contract by the New Energy and Industrial Technology Development Organization (NEDO) of the Japanese Government for the implementation and commercialization of cellulosic ethanol production technology, including installation, operation and testing, of a pilot bio-ethanol production plant at NEDO's alcohol production research site (in the city of Izumi, Kagoshima Prefecture) based on Arkenol's technology.

The present cellulosic bio-ethanol-based project calls for processing woody wastes and agricultural wastes (cellulosic biomass) to be the feedstock for bio-ethanol production in the United States, to supplement foodstuff biomass materials such as corn and sugar cane used as the feedstock for conventional bio-ethanol production.

Project outline

• Processing and production, marketing of approximately 30,000 kiloliters per year of bio-ethanol produced from cellulosic woody waste and agricultural waste.

Project location

• Orange County, California

Project partner

• Arkenol, Inc., of California

Scope of JGC involvement

• Supply of bio-ethanol production technologies and know-how, and the process design package
• Investing funds in the project company as an option; and
• Offering professional services for operation and maintenance (O&M) of the facilities.

Project schedule outline

• Completion of process design package: 3rd Q. 2006
• Start of engineering and construction (E&C): 1st Q. 2007
• Commercial operation start: 1st Q. 2009

The project has already secured through BlueFire Ethanol, Inc., the project development and operation vehicle, long-term feedstock supplies from a major American solid waste treatment and disposal company under a Letter of Intent, as well as sale of the full amount of ethanol product to a domestic retailer under a long-term commitment.

Moreover, it is now anticipated that the project will be underwritten by a U.S.-based, energy equity fund in conjunction with the feedstock company's equity and private equity and traditional project debt providers. Through the realization of the project, JGC will earn income from its partnership with Arkenol in the sharing of license fees, and a return on its capital investment.

With the realization of the project, JGC together with Arkenol and BlueFire Ethanol will be optimally positioned in the global, burgeoning renewable fuels market for the commercialization of cellulosic biomass–based ethanol production technologies. Currently, JGC is developing bio-ethanol production projects in Southeast Asia, including the Philippines, Thailand, and Indonesia.

The company is committed to pursuing business opportunities leading to technological advancement and project investment in biomass energy to meet societal and environmental needs.